pipe on Nostr: People never want to believe me that we're in a deflationary period, but we are. 1) ...
People never want to believe me that we're in a deflationary period, but we are.
1) Commercial banks are giving out fewer loans, so less money is being created.
2) The debt being created by the US government is being bought up with money that already existed (and often by foreigners or pension funds), that is looking for a safehaven and realize that rates are headed down mid-term.
3) People who have money are worried about bad times approaching, so they are saving, which is causing money velocity to slow.
4) Prices are still rising, albeit at a slower pace, but sale prices are often partially-based upon contracts, so they're sticky. More interesting is that sales are declining.
5) Companies are starting to lay people off. That's always the very last step before recession because it's such a big sunk cost, workers are difficult to replace, and the remaining workers are demoralized.
We are in a recession.
1) Commercial banks are giving out fewer loans, so less money is being created.
2) The debt being created by the US government is being bought up with money that already existed (and often by foreigners or pension funds), that is looking for a safehaven and realize that rates are headed down mid-term.
3) People who have money are worried about bad times approaching, so they are saving, which is causing money velocity to slow.
4) Prices are still rising, albeit at a slower pace, but sale prices are often partially-based upon contracts, so they're sticky. More interesting is that sales are declining.
5) Companies are starting to lay people off. That's always the very last step before recession because it's such a big sunk cost, workers are difficult to replace, and the remaining workers are demoralized.
We are in a recession.